PBM Rebates: Injecting Kickbacks: Medicare Prescription Drug Program

Tom Modeen
24,226 38 0

How Rebates Allow PBMs to “Game” the System


Drug costs are rising significantly without measurable increases in net cost to the manufacturer. The result is Medicare’s prescription drug costs are exploding and patients are assuming greater financial responsibility for their prescriptions. Increased drug costs also result in higher reimbursement concessions (DIR Fees) funded by the provider pharmacy. The root cause of these problems are the higher demands PBMs are placing on drug manufacturers for rebates.

RebatesIn order for a manufacturer to get medications classified as “on formulary” with large PBMs, rebates are mandatory. According to Citron Research, the rate of growth of PBM revenue in the category from 2013-2015 were double the rate of growth of gross drug spending.

“The reason drugmakers sharply raise list prices without a corresponding increase in net price is that PBMs demand higher rebates in exchange for including the drug on their preferred-drug lists”

— Enrique Conterno, President, Eli Lilly diabetes busines

Required manufacturer rebates never materialize in lower out of pocket costs to Medicare beneficiaries, reduction in costs to the Medicare Program or incentives for the dispensing pharmacy. They remain in the PBM coffers.

Express Scripts exploits the system like no other PBM. The percentage of revenue Express Scripts extracts from rebates is now equal to $ 100. per year for every citizen in the United States. With a significant amount of revenue manufacturers must apportion to PBM rebates, it is Rebatesundeniable that less money is invested in bringing potentially lifesaving medications to market.  Everyone loses, except Express Scripts.

This is a major problem in the United States and one that needs to be addressed by the new administration. The “knee jerk” reaction to high drug costs is always blame the manufacturer. Time to take a closer look at PBM tactics.

For further information on the topic, read the startling bulletin posted by CMS:






  1. online shopping for women

    Hiya! Quick question that’s entirely off topic. Do you know how to make your site mobile friendly? My website looks weird when browsing from my apple iphone. I’m trying to find a template or plugin that might be able to correct this issue. If you have any recommendations, please share. With thanks!

  2. online job posting websites

    I have read so many posts about the blogger lovers except this post is in fact a fastidious post, keep it up.

  3. financial advisor

    My spouse and I stumbled over here different web address and thought I should check things out. I like what I see so now i’m following you. Look forward to looking over your web page for a second time.|

  4. cameras for sale

    Hola! I’ve been reading your web site for a long time now and finally got the bravery to go ahead and give you a shout out from Huffman Texas! Just wanted to tell you keep up the excellent job!

  5. jobs at home

    I am genuinely thankful to the holder of this website who has shared this fantastic article at at this place.

  6. health problems

    Hello mates, its wonderful piece of writing concerning tutoringand entirely defined, keep it up all the time.

  7. online stock investing

    Good write-up. I certainly appreciate this website. Thanks!

  8. electronic stores

    Hi there! I’m at work browsing your blog from my new iphone 4! Just wanted to say I love reading your blog and look forward to all your posts! Keep up the excellent work!

  9. help for small businesses

    You need to take part in a contest for one of the most useful sites on the internet. I am going to recommend this web site!

  10. education tips

    I read this piece of writing fully concerning the comparison of newest and preceding technologies, it’s remarkable article.

  11. earn money

    Hi there, yup this article is in fact pleasant and I have learned lot of things from it concerning blogging. thanks.

  12. ovarian cancer symptoms

    I love what you guys are up too. This type of clever work and exposure! Keep up the excellent works guys I’ve incorporated you guys to blogroll.

  13. family at home

    I am in fact grateful to the holder of this web site who has shared this enormous post at at this time.

  14. cpap

    A person necessarily help to make critically articles I’d state. That is the very first time I frequented your web page and up to now? I amazed with the analysis you made to create this actual submit extraordinary. Wonderful process!

  15. borvest inkral

    Attractive component of content. I simply stumbled upon your blog and in accession capital to say that I get in fact loved account your blog posts. Any way I’ll be subscribing on your augment and even I success you get admission to consistently fast.

  16. created combination safes

    Thank you for your site post. Manley and I have been saving for our new ebook on this matter and your short article has made us to save the money.
    Your notions really responded to all our inquiries. In fact, in excess of what we had recognized ahead of

  17. shooting gearin order

    Excellent site. Plenty of useful information here. I’m sending it to a few friends ans also sharing in delicious.
    And obviously, thanks on your sweat!

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.